Target shareholders show displeasure with board

June 13, 2014

All 10 members of Target’s board of directors were re-elected at the retailer’s annual meeting on June 11, but there was strong opposition to several members and a proposal requiring an independent chairman nearly passed.

In the wake of Target chairman, president and CEO Gregg Steinhafel’s resignation on May 5, shareholders were asked to vote on a proposal to require the chairman to be an independent member of the board. The proposal drew considerable support with 45.8% of the shares represented at the meeting voted in favor of an independent chair. The roles of CEO and chairman at Target are currently split with CFO John Mulligan serving as interim CEO and board member Roxanne Austin serving as interim non-executive chair.

Austin drew a large number of negative votes with 22% of the 557 million shares represented at the meeting voted against her election. Board members who received a similar percentage of negative votes included Calvin Darden, Henrique De Castro, Mary Minnick and Derica Rice.

The largest number of negative votes were cast for Anne Mulcahy and James Johnson, with 36.4% and 37.1%, respectively. Mulcahy is the former chairman and CEO of Xerox who currently chairs the non-profit Save The Children Federation. Johnson is the founder of Johnson Capital Partners, a consulting firm, and also served as vice chairman of the private equity firm Perseus.

Not all board members incurred the wrath of shareholders, especially those who joined the board last year. Only 2.9% of the shares voted were cast against Kenneth Salazar. He is a partner at the law firm of WilmerHale and also previously served as U.S. Secretary of the Interior and was a Senator and Attorney General in Colorado. After Salazar, Douglas Baker was the board member who received the next highest level of support, with only 4.5% of shares voted against his election. Baker is the CEO of Ecolab.

“During this proxy season, we have had a productive dialogue with many of our investors, and we look forward to continued engagement in the weeks and months to come,” said interim chair Austin. “Along with the management team, we continue to focus on the following three priorities for Target: increasing U.S. traffic and sales; improving Canadian operations; and accelerating the company’s digital transformation to become a leading omnichannel retailer. While the search for Target’s next chief executive officer is ongoing, the board is working closely with the management team to make meaningful progress on each of these priorities.”

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